The final step in Amendment 64's integration and stores for adults 21 and up are slated to begin operating as early as January 2014.

Aug. 27, 2013

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Proposition AA would impose a 15 percent excise tax on wholesale marijuana with a consumer sales tax of 10 percent (plus the existing 2.9 percent), with revenue going toward public school construction, marijuana-industry regulation and local governments. Looking back: November 2012 election results

Amendment 64 made it legal under state law for adults 21 and older to possess personal amounts of marijuana. It mandated a regulatory framework to make way for retail marijuana stores to open as early as January 2014. Larimer County: Yes: 56 percent (98,164) No: 44 percent (77,837) Colorado: Yes: 55 percent (1,383,140) No: 45 percent (1,116,894)

Watch the Coloradoan Conversation on marijuana

The Coloradoan has been publishing stories about Colorado’s legalization of marijuna leading up to a Coloradoan Conversation at 7 p.m. Wednesday at the Coloradoan. Guests are Sheriff Justin Smith, marijuana attorney Rob Corry, Mason Tvert with the Marijuana Policy Project, TEAM Fort Collins director Ashley Kasprzak, Joshua Kappel with Sensible Colorado and addiction medical specialist Dr. Jeremy Dubbin. Seating is full, but you can watch the conversation live at 7 p.m. on Coloradoan.com. Visit coloradoan.com/marijuana for background stories.

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Retail sales of pot to adults 21 and older is the final step in marijuana legalization approved by Colorado voters last year.

Voters will return to the polls in November to decide on a statewide tax system intended to fund regulation and help support public-school construction, as mandated by Amendment 64.

Stores could be open as early as January, but Fort Collins officials plan to wait until after March to decide what route to take. Any city or county that approves marijuana sales stands to gain a piece of the statewide sales tax revenue as well as any locally imposed taxes.

Colorado and Washington are the only two states in the United States to legalize marijuana, while 18 others have legalized medical marijuana.

But like the pungent, skunky smoke recently observed at locations ranging from Old Town alleyways to the finish line of the USA Pro Challenge cycling race, questions linger:

How much money could legalized marijuana bring to Colorado?

If Proposition AA is approved, that would draw $39.5 million in sales taxes to be used for regulation and enforcement and to support related health, education and public safety costs. About $6 million would be distributed among communities allowing retail marijuana sales, according to the Blue Book estimates.

All this would result from a 10 percent sales tax on the ballot measure (in addition to the existing 2.9 percent state sales tax), which also would include a 15 percent excise tax on wholesale sales. The latter would be dedicated to schools.

How much money would go to public schools and what would it fund?

In the first year, taxes on wholesale marijuana are predicted to accrue $27.5 million for Colorado’s Building Excellent Schools Today program, according to the Blue Book packet.

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The program is aimed at helping schools with deteriorating buildings and limited resources, specifically targeting problems such as asbestos, building code violations, overcrowding and poor indoor air quality. Since its inception, the program has had $2.15 billion in requests and awarded $686 million for school construction projects plus $293 million in matching funds from local governments, according to the Blue Book draft.

The full amount from the 15 percent excise tax on wholesale marijuana sales would go to the schools, capping out at $40 million per year. Additional revenue would go to regulating the marijuana industry.

“If the voters don’t pass this tax measure, there will be a need to provide dollars to create a regulatory oversight framework in terms of compliance and everything else,” State Sen. John Kefalas said. “That would have to come from the general fund, which none of us is very happy about.”

Kefalas said the taxes help to ensure there is oversight by law enforcers and regulators.

“We need to make sure we do it right and to protect young people, and to make sure we address all the potential unintended consequences,” he said.

Larimer County Sheriff Justin Smith said he doesn’t have a position on the ballot issue but said the taxes could be violating federal drug laws.

No. Federal law supersedes the state laws. That means federal agents could bring charges against anyone in Colorado with pot.

Federal officials in Colorado don’t have the resources to prosecute people for having just a little bit of pot, University of Colorado law professor Richard Collins said in a previous interview. Collins specializes in constitutional law and Colorado government.

Opening storefront marijuana businesses is much more flagrant. But U.S. Attorney General Eric Holder hasn’t given strong indications on whether or how the feds might intervene with recreational marijuana in Colorado or Washington.

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“Every time we’ve talked to (Holder) about it — and I’ve talked to him many times about it — it’s just kind of the typical attorney thing: no answer, just nothing, talk around it, not yes, not no,” U.S. Rep. Jared Polis, D-Colo., recently told the Coloradoan. “I don’t like that. I like directness.”

Shortly after Amendment 64 was approved, federal officials say they were examining the voter-approved initiative but have no plans to change their enforcement strategy. In a statement, Colorado Attorney General John Suthers previously warned that the amendment sets up a conflict with federal laws.

Holder in 2009 said federal officials are committed to enforcing the federal Controlled Substances Act, which bans marijuana. Federal officials have previously used that law to prosecute Coloradans, even if they claimed protection under the state’s medical-marijuana laws.

How might Colorado pot stores be regulated?

Statewide regulations of retail pot are to be final by mid-October, before the election. Local regulations, and possibly extra local taxes, also would apply.

Estimates discussed in a recent set of hearings at the state level included a possible $5,000 application fee with operations taxes ranging from $2,750 to $14,000. A series of criminal background checks and residency requirements also would apply, according to a report from the Associated Press.

Liquor licenses, by comparison, require background checks, fingerprinting and more. For a new liquor license, the state charges a nonrefundable application fee of $1,025, plus license fees of $227 for liquor stores in cities and $500 to sell liquor in hotels, restaurants and bars. Then there are city-based fees, such a Fort Collins application cost of $500 and $50 for renewals. And there’s an annual occupation tax of $750 for liquor stores and $1,600 for hotels and restaurants and bars, according to the city of Fort Collins.

Will anyone who wants to be able to open a retail marijuana store be allowed?

No. Until July 2014, only existing medical-marijuana stores can apply to transition to retail marijuana. The state begins taking applications from the medical-marijuana stores in October, and several Fort Collins store owners have indicated they intend to do so.

After July 2014, others could begin applying to sell retail marijuana if they meet the background check and residency requirements.